Jim McNerney’s compensation rose 34 percent to $18.4 million in the last year.
According to the airplane maker’s recent proxy filing and news reports, CEO Jim McNerney’s compensation rose 34 percent to $18.4 million in the last year. This huge bump in pay comes as the aerospace and defense corporation saw a major rise in profits.
McNerney’s base pay of $1.9 million remained stagnant, however. As per the proxy filing, the CEO’s compensation included non-equity incentive pay of $8.7 million and stock option awards valued at $3.4 million.
Boeing says that its CEO deserved a pay rise after the company unveiled the new 787 and modified 747-8 airplanes, which won a contract to make a new tanker for the Air Force. The aircraft manufacturer declared net earnings of $4 billion for the year ended December 31, 2011.
Boeing’s shoddy billing practices
While Boeing saw improved profits, its compliance structure has been in need of attention.
Earlier this year, the company settled a $4.4 million whistleblower lawsuit that stemmed from improper billing practices. Allegedly, the aerospace and defense company tampered with bills prior to turning them into the US government for work relating to the Chinook helicopter program carried out at Boeing’s plant near Philadelphia, a news report confirms.
Court papers reveal that in 2003 the US Department of Defense (DoD) sealed contracts with Boeing to revamp and produce Chinook helicopters. The DoD ordered more than 100 new helicopters and Boeing agreed to conduct additional work on several hundred older helicopters.
But court documents indicate Boeing billed the government for ‘over-and-above work’ based on the length of time the repairs took.
And about 30 percent of the time, the government and Boeing found it difficult to reach an agreement on an accurate estimate. As a result, the ‘over-and-above work’ was billed to the DoD based on Boeing employees’ reports of how long the repairs actually took.
Vincent DiMezza, the employee-turned-whistleblower, is expected to take home $813,000.
Our free weekly email newsletters are an essential bulletin of GRC updates, insight and information.
Our experienced journalists provide relevant, timely information and analysis that will keep you at the forefront of industry developments and best practice.
Sign-up to receive your copy when you register with the Corporate Secretary website for free.